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Worried About Apple Pay? There Are Other Data Options for Retailers

It's Still Unclear How Much Apple Will Share

Ad Age Editor at Large, Jack Neff and Dunnhumby's Dave Balter at the Ad Age Data Conference

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One of the serious obstacles to Apple Pay may not be consumers, but reluctant retailers. Some retailers are hesitant to get on board with the system because they're wary of one company being the keeper of all their data, panelists told the second day of the Ad Age Data Conference on Wednesday. Especially if that company has previously indicated it was unlikely to share.

"For the retailer, it becomes a question of what are you willing to give up for what the customer wants," said Dave Balter, global head of investments at Dunnhumby, a company that helps retailers and brands use data to improve customer experiences. "Are you willing to say, 'We accept Apple Pay, but we know all that data is going into some massive database.'"

That squares with the news over the weekend that CVS and Rite-Aid stopped accepting Apple Pay, reportedly because they're part of a consortium, MCX, developing its own mobile wallet technology. In a blog post this morning, MCX said its merchant members signed up to use its its forthcoming payment product, CurrentC, "exclusively."

Shortly thereafter, the consortium confirmed it was hit with a data breach that compromised the email addresses of people who signed up for the beta version. The breach did not impact the app, the company said in a statement.

The hack could push more retailers back into Apple's arms.

Earlier this week, Apple CEO Tim Cook said one million credit cards were activated with Apple Pay in its first three days. "The feedback we are getting from customers and retailers about Apple Pay is overwhelmingly positive and enthusiastic," the company said in a statement on Monday.

But even if Apple Pay gets a good share of checkout transactions, and therefore reams of information about consumer purchases, Mr. Balter said retailers will still have access to various services and apps that can help collect data.

Some, like Shoparoo and Receipt Hog, offer cash and other rewards to consumers who capture their own receipts, so companies can get cross-retailer data.

Another, called Sociometric Solutions, even tracks speech patterns of sales associates to help retailers compare how the customer experience varies from one location to the next. Wearable audio devices capture the speed, tone, length and duration of the retail associates' speech to better understand how they interact with customers. With this information, retailers can learn why one location performs better than another, and how to retrain their employees.

The device does not track actual words. "There's a lot of concern with privacy there," said Mr. Balter, "but because there's no identifiable information, it's clean."

Retailers should also use data to see what's happening around them, and not just what's going on in their own stores, Mr. Balter said. It can offer a fresh perspective on the experience between the consumer and the retailer, he said.

"It's no longer about tracking your consumer inside your one shopping experience," said Mr. Balter. "Understanding what each of us are doing, that's what's becoming important."